BlackRock’s Larry Fink says the old world of work is ‘gone’ and that’s why everyone is quitting

BlackRock CEO Larry Fink at the Yahoo Finance All Markets Summit in February 2017.

BlackRock CEO Larry Fink wrote about the record number of workers quitting in his annual letter to CEOs.
Fink said that workers seeking out new opportunities is a good thing, and companies have to adapt.
Companies that don’t adjust to the “new reality” will “do so at their own peril.”

We’re in a new world of work, according to BlackRock CEO Larry Fink — and he says that’s a good thing.

In his annual letter to CEOs, Fink touched on everything that he thought was “vital to driving durable long-term returns” and for helping the company’s clients reach their goals. One trend he highlighted: The record-breaking number of workers quitting.

“Companies expected workers to come to the office five days a week. Mental health was rarely discussed in the workplace. And wages for those on low and middle incomes barely grew,” Fink wrote. “That world is gone.”

In November 2021, the last month that the Bureau of Labor Statistics released data for, a record 4.5 million workers quit. That capped off eight months of workers quitting at near-record highs. A record 1 million leisure and hospitality workers, the country’s lowest-paid sector, quit, while hiring remained strong — indicating that workers weren’t leaving the workforce, but rather switching into new roles as wages continued to grow.

While businesses shedding record number of records may sound like a cause for alarm for CEOs, Fink says that it’s a good thing workers are ducking out for bigger and brighter things in the new world of work — and companies that keep up will reap the rewards.

“Workers seizing new opportunities is a good thing: It demonstrates their confidence in a growing economy,” Fink wrote. Indeed, as Insider previously reported, some of the record number of quits may be backlogged ones. Workers found their career and financial prospects uncertain amidst the pandemic, but, as April 2021 hit, quits began to reach new record highs.

That’s coupled with workers’ desire to get more from their employer, Fink said. He highlighted flexibility and “more meaningful work” as places where workers might be looking for more. So, as companies have to “rebuild,” Fink writes that “CEOs face a profoundly different paradigm” than what they were used to.

The ‘Great Resignation’ signals a cultural and economic shift

Anthony Klotz, the organizational psychologist who crafted the phrase “Great Resignation,” previously told Insider that the pandemic prompted somewhat of an existential crisis for American workers.

“From organizational research, we know that when human beings come into contact with death and illness in their lives, it causes them to take a step back and ask existential questions,” Klotz told Insider. That causes humans to think about what brings them purpose and happiness — and question how it stacks up with what they’re currently doing.

For example, an Indeed survey of workers who have voluntarily quit during the pandemic found that 92% said “the pandemic made them feel life is too short to stay in a job they weren’t passionate about.”

Fink writes that “workers demanding more from their employers is an essential feature of effective capitalism,” driving prosperity and making talent recruiting more competitive, forcing companies to “create better, more innovative environments for their employees – actions that will help them achieve greater profits for their shareholders.”

What about the business that don’t adapt?

“Companies not adjusting to this new reality and responding to their workers do so at their own peril,” Fink writes. “Turnover drives up expenses, drives down productivity, and erodes culture and corporate memory. CEOs need to be asking themselves whether they are creating an environment that helps them compete for talent.”

Read the original article on Business Insider

Economy, Markets, Finance, Economy, great resignation, Quitting, Quitting job, quitting your job, Larry Fink, BlackRock

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